NI remains highest for petrol prices
The competition watchdog has ruled out a full investigation into the UK fuel market after concluding high prices are the fault of taxes and the cost of crude oil.
Wednesday, 30 January 2013
This comes as it is revealed that Northern Ireland remains the highest of all the UK regions for petrol prices, and joint highest for diesel.
The Office of Fair Trading (OFT) said competition in the fuel sector was "working well" and there was "very limited evidence" that pump prices rise quickly when the wholesale price goes up, but fall more slowly when it drops.
The report found that the UK had some of the cheapest pre-tax road fuel prices in Europe.
But, it was also noted that in the 10 years to 2012 pump prices increased from 76 pence per litre (ppl) to 136ppl for petrol. Meanwhile, diesel jumped from 78ppl to 142ppl.
The increases were caused largely by an increase of nearly 24ppl in tax and duty and 33ppl in the cost of crude oil.
OFT chief executive Clive Maxwell said: "We recognise that there has been widespread mistrust in how this market is operating.
"However, our analysis suggests that competition is working well, and rises in pump prices over the past decade or so have largely been down to increases in tax and the cost of crude oil."
Mr Maxwell said there may be issues with competition at a local level.
"Where we receive evidence of potential anti-competitive behaviour we will consider taking action."
The OFT launched a call for information on the UK road fuel market in September last year to determine whether there were competition problems that needed to be addressed, before investigating concerns over the prices charged for petrol and diesel at the pumps.
The Consumer Council conducted an on-line survey of Northern Ireland consumers to contribute to the report. The independent organisation is calling on the large supermarkets in NI to end local fuel pricing in the region.
Chief Executive Antoinette McKeown said: "The [OFT] report found that Northern Ireland prices are slightly higher due to the lower volumes of fuel sold and lower prevalence of supermarket chains which can drive competition in local areas.
"Consumer Council price monitoring for the week commencing 21st January 2012 shows that prices differ by up 6ppl across the same supermarket outlets for the same type of fuel."
Ms McKeown highlighted that the OFT report clearly indicates that large supermarkets can buy their fuel at a lower cost.
"We recognise that local pricing is not a competition issue but halting this practice and giving the best possible price to all NI consumers would show that supermarket retailers are doing right by their customers."
Campaigners had called on the OFT to announce a full investigation into the fuel sector. They now say drivers would feel let down by the findings.
FairFuelUK spokesman Quentin Willson said: "UK consumers will be bitterly disappointed. The nation will feel let down. Quite frankly, I'm shocked.
"The OFT investigated in 1998 and now have done so again. Every motorist and business in Britain instinctively knows that something's not right. The Americans and the Germans are holding inquiries - why aren't we?," he demanded.
Mr Wilson said the OFT appears to have failed to address the key issues of why diesel is more expensive than unleaded in the UK when this is not the case in Europe; why falls in the oil price take so long to be reflected at the pump and why there are such variations in price, often from the same branded forecourts, within the same area.
RAC technical director David Bizley said they had "campaigned long and hard" for greater price transparency and will continue to do so until this is recognised as a serious issue.
He continued: "The reasons behind this massive rise need to be conveyed clearly to the motoring public and justified so that households, businesses and the economy as a whole are not harmed by ever-increasing pump prices."